On 3 July 2023, Law No. 14,611/2023 was enacted, introducing measures to ensure equal pay and remuneration criteria between men and women who perform the same function or work of equal value, popularly referred to as the “Equal Pay Law.”
The Equal Pay Law requires companies to publish a salary transparency report of their employees and, although published in July 2023, it was only regulated in November 2023 through Decree No. 11,795 and the Ministry of Labor and Employment (MTE) Ordinance No. 3,714.
Salary Transparency Report
The Salary Transparency Report must be published by companies that have at least 100 employees. It shall allow for the objective comparison of salary/remuneration and the proportion of management and leadership positions filled by women and men, including information that may provide statistical data on possible inequalities due to race, ethnicity, nationality, and age.
To compile the Salary Transparency Report, companies are required to complete a form available on the MTE website in February and August each year. This form concerns:
- The existence of a career structure and a plan for positions and salaries within the company;
- Criteria for employee promotion, including access to leadership roles;
- The presence of incentives for hiring women, and
- Initiatives that support the sharing of family responsibilities.
The MTE may request that companies provide additional explanations regarding the published information.
Besides the data from the form filled out by companies, the MTE will gather information entered into eSocial (a Brazilian digital platform for employers to submit employee data to the government) by employers to make the Salary Transparency and Remuneration Criteria Report available.
When the Report becomes available, in March and September of each year, companies are required to publish it on their websites, social networks, or similar platforms in a visible location to ensure wide dissemination to employees, collaborators, and the general public.
Non-compliance and Fines
Employers who do not comply with the legal obligation to publish the Report may face a fine of up to 3% of their salary payroll, capped at 100 minimum wages.
Should salary inequalities or discrepancies in remuneration criteria be detected after the salary transparency report’s publication, the company may incur a fine equivalent to 10 times the salary owed by the employer to the discriminated employee, doubled in the case of repeat offenses, notwithstanding any payments for salary differences accrued over time and the right to claim for moral damages.
Furthermore, if inequalities are found, the company will be notified by the Labor Inspection Audit to create, within 90 days, an Action Plan to Mitigate Salary and Remuneration Criteria Inequality between Women and Men.
The Action Plan should outline and execute goals, timelines, and mechanisms for measuring outcomes to address the highlighted disparities, including a leadership training program on pay equity, diversity promotion, and inclusion in the workplace, as well as training and development for women’s entry and retention in the labor market. Filing a copy of this plan with the respective trade union is obligatory.
A complaints channel for salary and remuneration criteria discrimination will be provided through the Digital Work Card app, along with any other channels that may be established for this purpose.